Taking context and strategy seriously: the contracting out decision in the U.S. public education

ABSTRACT

This study examines how contracting decisions can be influenced by organizational contexts, managerial strategies, and the interaction between the environment and strategies, building on Miles and Snow’s strategy typology—prospectors, defenders, and reactors. Our empirical evidence shows that the fragmented political context affects contracting decisions and only the reactor strategy leads to less contracting. Moreover, the impact of top-level managers’ particular strategic stances on contracting decisions becomes greater as fiscal power is centralized within a relatively simpler intergovernmental political setting. Likewise, a higher level of financial deficiency can ameliorate the negative effect of a defender strategy on contracting decisions.

KEYWORDS:

• Contracting decision
• strategy
• political context
• budget turbulence
• public education

Disclosure statement

No potential conflict of interest was reported by the author(s).

Additional information

Notes on contributors

Eunju Rho

Eunju Rho is an assistant professor in the Department of Public Administration at Northern Illinois University. Her research interests include interorganizational management, government contracting, managerial behaviour, and performance management.

Soojin Kim

Soojin Kim is an assistant professor of the Public Policy and Global Affairs Programme, School of Social Sciences, Nanyang Technological University, Singapore. Her research interests include public budgeting and financial management, contracting out (back-in), public-private partnerships, and institutional arrangements in policy choices.

Sumin Han

Sumin Han is an assistant professor in the Department of Systems and Technology, Raymond J. Harbert College of Business at Auburn University. Her research interests include public and business management, a Bayesian approach, and strategic management.